Leveraging the Grapevine: How to Encourage Ethical Advocates to Build Goodwill for Your Business

Some people just love to talk about companies. And those who do tend to have a more firm belief system about them--favorable or unfavorable--than those simply exposed to their advertising, direct mail, or media coverage (see figure 1).

Ipsos recently conducted research on the performance of 30 major U.S. companies from a variety of sectors on a range of reputation drivers. We found that in the last 12 months, at least one third (34%) of the general population has talked with a family member, friend or colleague about at least one leading retailer, while one entertainment company has been a topic of conversation for one in five (20%, see figure 2).

Certain types of people are more vocal and opinionated about companies than others. Just over a quarter (26%) of Americans fall into a group we call "Ethical Advocates:" These are people who regularly advise their friends, family, colleagues and others to use--and more often, not to use--a particular company due to their beliefs of whether it acts responsibly or not.

Propensity to discuss a company positively or negatively is illustrated in the case of the major retailer. Almost twice as many Ethical Advocates have been involved in a discussion about the company compared with the general population (59% versus 34%). They are also more likely to be critical of it. This pattern is repeated for companies in other categories.

There are many reasons why corporations need to pay attention to Ethical Advocates. Here are two:

1. Ethical Advocates are informed: They are more likely to know at least a fair amount about major corporate brands than the general population.
2. They are also critical: They are far more likely to be "unfavorable" toward companies. They are also more negative about company performance on key indicators.

Consumers cite quality products and services at a fair price as their basic expectation of any company. But deeper analysis reveals some hidden complexity.

A comparison of what Americans say is important when judging companies with what is found to drive favorability (based on a correlation analysis) shows that corporate responsibility and communications play as big a role as product/service attributes. Corporations that are perceived to be socially and environmentally responsible and/or good at communicating are well regarded while the reverse is true for companies that perform poorly in these areas. Ethical Advocates are even more likely to consider a company's social and environmental performance when making a judgment of it (see figure 3).

(Click to enlarge image)

Corporate Responsibility Roadmap for the American Public

Further analysis of the perceived strengths and weaknesses of various companies provides a list, or a road map, of eight responsible corporate behaviors that applies across all sectors:

1. The company provides quality products and services at a reasonable price (i.e., it doesn't come across as making excessive profits at the expense of the consumer).
2. The company provides universal access to its products and services (i.e., it doesn't discriminate against sections of society because of their wealth, age, or geography). This is especially pertinent for financial service, telecommunications, and pharmaceutical providers.
3. The company treats its employees well (both at home and abroad).
4. The company's activities are not detrimental to the environment.
5. The company communicates clearly about its business, products, and services so the consumer is able to make an informed choice. Companies with an overarching corporate brand, especially those in consumer goods, are expected to create awareness of their product portfolio.
6. The company is smart and respectful in its sales, marketing, and advertising (i.e., it doesn't adopt aggressive sales techniques, excessive mailings, or irresponsible advertising that targets children).
7. The company supports the local economy by sourcing U.S. products and labor (especially so for the retail and automotive sectors).
8. The company is committed to innovation (particularly if it is in technology or pharmaceuticals).

Meet Susan. Ethical Advocate "Susan" is typical of Ethical Advocates. She is female, young (33 years old), college educated, lives in the Northeast, and has two children. Only last week, she steered her mother away from an over-the-counter medicine because she heard that the manufacturer had recently launched an effective but highly expensive prescription drug that is out of reach to those on lower incomes. She is also encouraging her friends and family to shop at a particular supermarket because it stocks local organic produce. Why? Because her neighbor, who also fits the profile of an Ethical Advocate, told her about this retailer's responsible practices a few months ago.

Susan puts her money where her mouth is. She regularly chooses products that have some social or environmental benefit, such as those made with recycled content or produced via a fair trade arrangement. She also practices what she preaches and takes personal steps to be environmentally and socially responsible. Most Ethical Advocates, for example, recycle, donate money to charity, and take action to be more energy-efficient (see figures 4 and 5).

Key Take Away

It is rare for the American public to have a comprehensive knowledge of a company's performance on indicators other than products, services, and value. Companies have a great opportunity to develop goodwill by differentiating themselves from their competitors and other large companies by demonstrating a commitment that exceeds expectations in any of the eight areas identified in the Corporate Responsibility Roadmap. Sponsors of good corporate deeds would benefit from targeting their communications about such initiatives toward Ethical Advocates hence mobilizing an army of ambassadors to recommend the company, its products and services and, ultimately, encouraging greater goodwill among the population at large.

Online interviews were conducted as part of Ipsos' I-Rep program between July 27 and August 2, 2006 with a nationally representative sample of 2,024 adults aged 18 and over from Ipsos' U.S. internet panel. The research investigated the performance of 30 major companies from a variety of sectors on a range of reputation metrics.